Food co-ops look to change the way Alaskans shop for groceries

Two yet-to-open stores in the Alaska cities of Fairbanks and Juneau may change the way Alaskans view their groceries. Already a common business model in the Lower 48, Alaska could soon see its first food cooperatives -- grocery stores owned by the shoppers who frequent them -- open soon.

Cooperatives aren't a foreign concept to Alaska -- the state has many examples of co-op businesses, including utility companies like Matanuska Electric Association and Chugach Electric in Southcentral Alaska. That also includes credit unions like Denali Alaskan and Alaska USA. Alaska even has the most successful fishing co-op in the country in Sitka, at the Seafood Producer's Cooperative processing plant, said Andrew Crow, cooperative program manager with the University of Alaska Anchorage.

And now, the Last Frontier is poised to break into the cooperative food market.

In Fairbanks, the Fairbanks Community Cooperative Market is still a work in progress, though an independent analyst has determined there's a viable market for it in the Interior Alaska city of about 30,000. It's slated to open late this year or early in 2013, acccording to General Manager Mary Christensen.

Community members had been discussing the possibility of a co-op for more than a year, and have already raised more than $1.2 million and secured a 6,000-square-foot space for the storefront. The concept originated with a group of Fairbanks residents interested in consolidating local food options under one roof.

In Alaska's capital city of Juneau, the reason that the cooperative idea found footing is much different. In April, the Alaskan and Proud Grocery, known as the A&P, announced that it would be unexpectedly closing in fall 2012, leaving residents of downtown looking at a drive out of the heart of town just to shop for groceries.

So residents there began looking into the cooperative concept, and they liked what they saw. Chief among the benefits is the ability to tailor the store to the needs of the community, said Capital City Market Cooperative steering committee member Evelyn Rousso.

"A co-op can be whatever we want it to be," Rousso said. "It's not going to be what some people's image of a co-op is -- it's not what could be called a 'hippy store.'"

Pioneers of organic and sustainable foods

Many cooperative groceries have sprung up to emphasize locally-grown grocery options, like produce and meat. That's the reason for the Fairbanks store and many others around the country.

"Food co-ops were pioneers in the area of organic and sustainable foods, particularly in the last 30 or 40 years," said Kelly Smith, director of marketing and communications for the National Cooperative Grocers Association.

And that's a big part of many cooperatives' business model. But there are exceptions, she said.

"Food co-ops open up in all different circumstances, whether it's lack of access to particular types of goods, like perhaps local food or organic food, or simply out of the desire of a group of people to work together to form a new enterprise," Smith said. "In some cases, existing businesses have been successfully transitioned to a cooperative ownership model when the original owner or company no longer wished to maintain it."

Juneau co-op in planning stages

That latter example is similar to what's happening in Juneau. That cooperative is focused more on filling the niche left behind by the closure of the A&P, though Rousso emphasized they would take advantage of local offerings whenever possible.

Located in the middle of downtown Juneau, the A&P saw a brisk deli business, among other things, Rousso said. Especially since Juneau's other groceries are what Juneau residents call "out the road," meaning downtown visitors would need a car to get there.

The Juneau co-op is still in the planning stages, and may never become a reality. Rousso said the steering committee is fundraising to have a consultant come to Juneau to evaluate the feasibility of a co-op in the community. If the numbers are solid, then the plan will hopefully move ahead.

Alaska does have its own challenges when it comes to cooperative groceries, though, said UAA's Andrew Crow. In many states, the supplier of the food is located near the store, meaning that those locations can have smaller storage areas, as Crow saw on a tour of cooperative groceries in western Washington.

"The storage space in most stores was tiny," Crow said, "usually less than 10 percent of the store's overall square footage. They can't do that in Juneau, so they probably need to have a bigger store."

That's because much of Alaska's food is barged in, meaning small orders are less feasible in more remote locales like Fairbanks and Juneau. The latter city isn't even accessible by road.

Perhaps working in Alaska's favor is that local food generally only makes up about a quarter of a cooperative store's revenue, no matter how much is stocked, Crow said. That means Alaska, with its fewer local options, could still make a cooperative work. Key is that a cooperative is a full-service grocery store, which means it must stock not just groceries but toilet paper, toothpaste, and other items normally found in larger groceries.

Are other Alaska cities ready for co-ops?

If the cooperative idea works in Alaska, will other communities jump on the co-op bandwagon?

That's hard to say, though some rural communities already have another form of cooperative program, called a buying club. In that case, groups of citizens who can't get certain goods band together to divide the cost of buying products wholesale and having them delivered, bypassing the retailer aspect.

Such clubs are prevalent in Alaska, Crow said, where the option can be cheaper than going to a retail store and buying groceries piecemeal.

Crow said that cooperatives usually need a catalyst to get started. In Fairbanks, the desire for one location for local food was the catalyst; in Juneau, the need was geographical.

"Juneau's a 'joining' type of community," Crow said. "The way they get things in Juneau is they join together and they get it. In Anchorage, you can wait around for businesses to come to you. But if you wait around in Juneau, it's never going to happen."

How to join co-ops in Fairbanks, Juneau

Do you live in Fairbanks or Juneau, and are interested in joining the co-op? They're always accepting members. There's a fee of $250 to become a member of the Capital City Market Cooperative ($500 to become a "founding member" while the store is in the planning stage), and a $200 fee to join the Fairbanks Community Market Cooperative. Click the link to read much more about the program. You can contact the Juneau co-op here.

And Crow, who has worked closely with both the Juneau and Fairbanks projects, said he's always eager to hear from anyone else in Alaska about the possibility of the program in their area. You can email him here.